Published 28 January 15

Major retailers started to drop milk prices in March 2014, which appears to have prompted an upturn in milk* sales. On the surface, this could be viewed as a positive move in that more milk is being consumed. However, previous evidence suggests that growth in retail milk sales is predominately the result of population growth and that consumers do not buy more milk as a direct result of lower prices. This can be seen from the last supermarket “price war” in 2010-11 which did not lead to any significant additional growth in retail milk sales. Closer examination of the picture in 2014 shows three key areas which have contributed to the faster growth:

The frequency of milk purchases has increased, in line with the general trend in grocery shopping towards more frequent trips to high street convenience stores. A shift towards price reductions on single containers compared to larger volume multi-buy offers may have further added to this.

Whole milk sales rose by 4.0% in the 52 weeks ending 12 October 2014, which is likely to have been driven by the growing proportion of young children in the population.

Volumes of skimmed milk sold rose 8.5% over the same period, with a 24.7% rise in the volume consumed by the “pre family” age group.